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To promote stable, constructive labor-management relations through the resolution and prevention of labor disputes in a manner that gives full effect to the collective-bargaining rights of employees, unions, and agencies.

This matter is before the Authority on exceptions to an award of
Arbitrator John C. Shearer filed by the Agency under section 7122(a) of the
Federal Service Labor-Management Relations Statute (the Statute) and part 2425
of the Authority's Regulations. The Union filed an opposition to the Agency's
exceptions.

For the following reasons, we conclude that the Agency's exceptions
provide no basis for finding the award deficient under section 7122(a) of the
Statute. Accordingly, we deny the exceptions.

II. Background and Arbitrator's Award

The Arbitrator resolved the following issue, as agreed to by the
parties:

Did the [Agency] correctly apply the provisions of the Agreement
and/or FPM Letter 338-11 to qualify and subsequently select [the selectee] for
the position of Supervisory Training Instructor, NM-12/13 (Chief, Industrial
Training Branch, Human Resources Development Staff)? In either case, what
should the remedy be?

Award at 2. The Arbitrator concluded that "the weight of the evidence
presented persuade[d] [him] that the [Agency] did not correctly apply the
provisions of FPM Letter 338-11 to qualify and subsequently select [the
selectee] for the position in question."(1)Id. at 7. In so concluding, the Arbitrator made the
following findings that are disputed here.

1. The position description for the disputed vacancy was classified at
Grade 13 until after the selectee, a Grade 12 employee, was reassigned to
the position at the Grade 12 level. After the selectee's reassignment, the
disputed position was reclassified at Grade 12/13. The Agency "offered no
explanation" for this action, which "strongly suggest[ed] a manipulation so
that the move would not appear to be a promotion." Id. at 3-4.

2. The Agency failed to "demonstrate the legitimacy of its substantial
downgrading" of requirements in the Grade 13 position description for
"extensive technical or trade knowledge, which [the selectee] admittedly
lacked, but which at least some [g]rievants had." Id. at 4.

3. The Agency "violated proper procedure" by assigning a particular
management official to evaluate the grievants and then, "as a member of the
Appraisal Board, [to] review and approve his own evaluations [,]" functions
that FPM Chapter 335, Appendix A "strongly implie[d]" should be separated.(2)Id. Although the Agency had
a "legitimate reason" for the official to evaluate the grievants, the Agency
"offered no rationale" for appointing the official to the Appraisal Board.
Id. at 5.

4. Although the Appraisal Board was not required to personally
interview the grievants, "interviews would have been useful in identifying
supervisory or other relevant experience prior to employment by the [Agency]
which may not have been evident from personnel records . . . ."
Id.

5. The vacancy announcement for the disputed position contained the
following "NOTE":

For actions other than a promotion, modified qualifications will be
used to qualify applicants when their backgrounds include closely related
experience that provides the skills necessary for successful
performance.

Id. at 6. This statement did "not satisfy the clear requirement"
of FPM Letter 338-11, Paragraph 4, that: "If a modified standard is used
for a personnel action . . . the qualification requirements to be met must be
identified in the vacancy announcement[]" because: (1) the vacancy announcement
did not inform applicants where they could locate the modified qualifications;
and (2) modified qualification standards did not exist until after the selectee
was selected. Id. at 5, 6.

6. The Agency used "modified qualifications" to select the selectee
before completing evaluation procedures for the grievants, for whom modified
qualifications could not have been used. By using the modified qualifications
in this way, the Agency "evidently determined, prior to the prescribed
procedures, that no [g]rievant, or other applicant . . . would be selected."
Id. at 6. The Agency's action "violated the requirement for competitive
selection[,]" and "violated the spirit and the letter of FPM Letter 338-11."
Id. at 7.

The Arbitrator concluded that, "[b]ut for" the Agency's violations, it
"could not have selected [the selectee]," an individual who the Agency
"acknowledge[d], was qualified only under the modified qualifications which it
improperly invoked." Id. As his award, the Arbitrator sustained the
grievance and "invalidated" the selection. Id. at 8. He ordered that the
evaluation and selection process be rerun as of the date of the original
vacancy announcement, using the original position description without modified
qualifications, and that, if the selectee applies, then he should be evaluated
without credit for time spent in the position.

III. Exceptions

A. Agency's Contentions

The Agency contends that each of the six numbered arbitral findings set
forth above is "contrary to law and regulation . . . ." Exceptions at 1.

The Agency asserts that the first arbitral finding is contrary to
Panama Canal Personnel Manual (PCPM) Chapter 335, Appendix A, A-1, (e)(6).(3) According to the Agency, the grade
level of the position description was changed because of a lack of qualified
candidates at the Grade 13 level. The Agency argues that the change had no
impact on the selectee and, in fact, had a favorable impact on the grievants,
who were qualified for the position only at the Grade 12 level. The Agency
asserts that "[e]ven if the downgrade was error, and it was not, it was not
harmful error." Id. at 2.

As for the second finding, the Agency claims that it did not "downgrade
any of the requirements of the position." Id. at 5. According to the
Agency, "[b]oth the selectee and the grievants were lacking in one or more of
the requirements, but somebody had to be selected and, in the end, managerial
experience prevailed over technical knowledge." Id.

In connection with the third finding, the Agency asserts that the "dual
role" of the management official as a rating official and a member of the
Appraisal Board did not violate applicable regulations, and neither helped nor
harmed any of the candidates. Id. at 8. According to the Agency,
the Arbitrator's finding to the contrary is unsupported.

The Agency asserts, in connection with the fourth finding, that
personal interviews of applicants are not required by applicable regulations.
The Agency claims that information that could have been obtained through such
interviews was available elsewhere.

With regard to the fifth finding, the Agency states:

Regardless of whether the modified qualification authority is used or
not, the same standard is used. The modified qualification authority merely
permits the qualification of an applicant who does not meet all specialized
experience requirements. No modified standard is required or even contemplated;
accordingly, none was created or identified.

Id. at 10. The Agency claims that the relevant vacancy
announcement informed applicants where to obtain information regarding
qualification requirements, and that "[r]eferring the applicants to the
qualification requirements rather than identifying them in the vacancy
announcement would be a de minimis error, if error at all." Id.

As for the sixth finding, the Agency argues that its use of modified
qualifications did not violate applicable regulations and did not affect the
grievants because they qualified for the position without the use of modified
qualifications. The Agency states that it contacted "the OPM Qualification
Standards Branch and described the agency's use of the modified qualification
requirements for this vacancy." Id. at 14 n.3. The Agency states that
OPM "faxed back a handwritten response indicating the modified qualification
standards were properly used." Id.

In addition to its exceptions to the six arbitral findings, the Agency
contends that the award affects the exercise of its right to select under
section 7106(a)(2)(C) of the Statute because "[t]he [A]rbitrator's ban of
the modified qualification authority prohibits expansion of the area of
consideration[.]" Id. at 14. The Agency argues that, "[i]n effect, the
[A]rbitrator has prescribed the sources from which the selection is made
. . . ." Id.

B. Union's Opposition

As a preliminary matter, the Union contends that the Agency's
exceptions were untimely filed.

On the merits, the Union argues that the Agency has failed to
demonstrate that the award violates law, rule, or regulation. In the Union's
view, changing the grade of the position description, changing the position
requirements, and failing to list modified qualifications requirements in the
vacancy announcement were aimed at "predetermining the outcome of the selection
process." Opposition at 8.

The Union asserts that testimony supports the Arbitrator's finding that
the grievants were harmed by the dual role of a management official in rating
the applicants and serving on the Appraisal Board, and that the Arbitrator's
finding in this regard does not constitute a violation of law, rule, or
regulation because the Arbitrator "pointed out the irregularities but no
remedies were mandated." Id. at 13. Similarly, the Union asserts that
the Arbitrator's finding regarding the Appraisal Board's failure to hold
interviews did not violate law, rule, or regulation, and that the Arbitrator
prescribed no remedy for this irregularity. The Union also argues that the
Arbitrator did not commit reversible error when he determined that the Agency
improperly invoked modified qualifications standards. With regard to the
Agency's right to select from any other appropriate source under
section 7106(a)(2)(C)(ii), the Union asserts that the award does not limit
the area of consideration to be used in soliciting applicants for the
vacancy.

IV. Analysis and Conclusions

A. The Agency's Exceptions Were Timely Filed

The time limit for filing exceptions to an arbitration award is 30 days
beginning on the date the award is served on the filing party. 5 C.F.R. §
2425.1(b). The date of service is the date the award is deposited in the U.S.
mail or is delivered in person. 5 C.F.R. § 2429.27(d). If the award is
served by mail, 5 days are added to the period for filing exceptions to the
award. 5 C.F.R. § 2429.22.

The Union's assertion that the Agency's exceptions were not timely
filed fails to take into account that the award was served by mail and, as
result, 5 days are added to the period that the exceptions would otherwise be
due under section 2429.22 of the Authority's Regulations. E.g.,
U.S. Department of Housing and Urban Development, Washington, D.C. and
American Federation of Government Employees, Local 476, 46 FLRA 878,
879-80 (1992). Calculated correctly, exceptions to the award were due no later
than February 27, 1995, the date on which they were filed. Consequently, the
exceptions were timely filed.

B. The Award Does Not Violate Law or Regulation

Under section 7122(a)(1) of the Statute, an arbitration award will be
found deficient if, interalia, it conflicts with law, a
Government-wide, or a governing agency, regulation. E.g., U.S.
Department of Justice, Federal Bureau of Prisons, Medical Facility for Federal
Prisons and American Federation of Government Employees, Local 1612, 51
FLRA 1126, 1135 (1996). Examination of arbitration awards for consistency with
law, rule, or regulation, requires the Authority to review denovo the questions of law raised by the award and the exceptions.
E.g., id.; Social Security Administration and American
Federation of Government Employees, Local 3342, 51 FLRA 1700,
1705 (1996). Generally, an agency's interpretation of its own regulation is
controlling, unless it is clearly erroneous or inconsistent with the
regulation's plain wording. FLRA v. U.S. Department of the Treasury,
Financial Management Service, 884 F.2d 1446, 1454 (D.C. Cir. 1989) cert.
denied, 493 U.S. 1055 (1990).

As to the first disputed arbitral finding -- that lowering the
vacancy's grade level strongly suggested that the selectee was preselected --
the regulation cited by the Agency, PCMP Chapter 335, Appendix A, defines
"developmental positions." Even if the disputed vacancy is a developmental
position, the Agency has not explained how the award, which neither prohibits
nor requires the use of such positions, conflicts with the plain wording of the
regulation, which does not speak to methods of selection. No such conflict is
apparent from any reasonable construction of the regulation.

The Agency's claim that it did not lessen the technical requirements of
the position evidences only disagreement with the Arbitrator's contrary second
finding; the claim does not provide a basis for concluding that the finding is
inconsistent with the applicable regulation. E.g., U.S. Small
Business Administration, Charlotte District Office, Charlotte, North Carolina
and American Federation of Government Employees, Local 3841,
49 FLRA 1656, 1659-60 (1994). The Agency also claims that management
officials may properly participate in selection actions in the dual role of
evaluator and appraisal board member. However, the Agency offers no citation or
other authority for its argument that the Arbitrator's third finding -- that
FPM Chapter 335, Appendix A "strongly implie[d]]" to the contrary -- is
inconsistent with the regulation. Award at 4. In this regard, the Arbitrator
stated that, by assigning the management official to act both as an evaluator
and a participant on the Appraisal Board, the Agency "violated proper
procedure." Id. However, when the statement is read in context, it is
not an arbitral finding that the Agency violated FPM Chapter 335, Appendix
A. Instead, we construe the statement as a reference to generally accepted
principles of proper procedure. To read the statement as finding a violation of
the regulation renders it inconsistent with the statement in the award that
immediately follows it: that FPM Chapter 335, Appendix A merely implies (albeit
strongly) that the Agency acted improperly.

With respect to the fourth finding, the Arbitrator specifically found
that personal interviews were "not mandated," but that they "would have been
useful in identifying supervisory or other relevant experience [acquired] prior
to employment by the [Agency] which may not have been evident from the
personnel records . . . ." Award at 5. The Agency's disagreement with the
Arbitrator's finding of fact that interviews "would have been useful" does not
demonstrate, and no other basis is apparent on which to conclude, that the
award is deficient as inconsistent with law or regulation.

As to the fifth finding, there is no dispute that FPM Letter 338-11
requires the Agency to identify modified qualifications in a vacancy
announcement. Although the Agency asserts that its reference to minimum
qualifications standards satisfied this requirement, the Letter specifically
provides that agencies may modify OPM's minimum qualification standards in
certain circumstances, including reassignments. Thus, the plain language of the
Letter indicates, contrary to the Agency's position, that modified
qualification requirements and minimum qualification standards are not the
same. As such, the Arbitrator's finding that the reference in the vacancy
announcement to the minimum standards did not satisfy the requirement of the
Letter is not inconsistent with the regulation.

The Agency appears to misconstrue the Arbitrator's sixth finding: that
use of modified qualifications requirements prior to evaluating candidates
eligible under unmodified requirements violated FPM Letter 338-11. The
Arbitrator did not find that invocation of modified qualifications requirements
precluded promotion of any of the grievants. Rather, his finding questions the
timing of the use of such requirements and provides support for his conclusion
that the action involved preselection. As such, the Agency's argument that the
use of modified qualifications authority did not harm the grievants because
"they did not need it[]" misses the point and does not demonstrate that the
Arbitrator erred.

Finally, with respect to the Agency's argument regarding its right to
make selections under section 7106(a)(2)(C) of the Statute, an award directing
an agency to select from among a specified group of candidates is deficient
under section 7106(a)(2)(C) because it denies management the right to
select from any other appropriate source. E.g., U.S. Department of
Veterans Affairs Regional Office, Boston, Massachusetts and American Federation
of Government Employees, Local 2772, 51 FLRA 1769, 1774-75 (1996)
(VA Regional Office). However, the award in this case does not require
the Agency to select from among the grievants, or any other candidate
identified in the rerun merit promotion action. The award requires only that
the selection procedure be rerun "as of the date of the Vacancy Announcement, .
. . using the original Position Description without any modified
qualifications." Award at 8. The Authority has held that, where an arbitrator
finds that a selection process did not conform to applicable requirements, the
arbitrator may order that the selection be rerun or reconstructed as a
corrective action. VA Regional Office, 51 FLRA at 1774. The award in
this case is consistent with the Arbitrator's findings concerning the disputed
elements of the selection process, and the award directs a reconstruction of
what the Agency would have done had it acted properly.

In addition, the award does not prevent the Agency from using modified
qualifications requirements and a revised position description if no candidate
referred under unmodified requirements and the original position description is
selected. Although it is not clear that using modified qualifications affects
the area of consideration for a merit promotion action, even assuming that it
does, the award would not prevent the Agency from using whatever area of
consideration it desired in another selection action if no selection is made in
the one required by the award.

In these circumstances, we conclude that the Agency has not established
that the award is deficient under section 7106(a)(2)(C)(ii) of the Statute
because of its effect on the Agency's right to select from any appropriate
source. National Labor Relations Board and National Labor Relations Board
Professional Association, 50 FLRA 88, 92 (1995). Moreover, the
disputed arbitral findings are not inconsistent with law or regulation.
Accordingly, we deny the Agency's exceptions.

V. Decision

The Agency's exceptions are denied.

FOOTNOTES: (If blank, the decision does not
have footnotes.)

1. The Agency asserts, and the Union
does not dispute, that rescission "of parts of the Federal Personnel Manual is
irrelevant[,] inasmuch as the application of FPM Letter 338-11 to the [Agency]
is based on its . . . adoption by the Panama Area Personnel Board[.]"
Exceptions at 9 n.2. In these circumstances, requirements in the Letter are
applicable to the parties in this case as a governing Agency regulation,
and we will construe references to the FPM Letter as references to the Agency
regulation.

2. The Arbitrator quoted the following
portion of the cited FPM Chapter, which provides that an Appraisal Board "will
evaluate all qualified candidates by using techniques such as":

Developmental positions are positions in which employees are
hired at a lower grade level than the target level, are given grade-building
experience, and are promoted until they reach full performance
level.